Don Braid: Time for a performance review

Some say New Zealand isn’t working but Mainfreight’s group managing director Don Braid thinks it is and has some suggestions as to how the economy, and the country, could be doing much better.

Don Braid believes the key to our economic success begins with the business community looking offshore to ensure larger, more strategic growth. Photo / Natalie Slade

So - why isn't New Zealand working?

Frankly, we think it is working - but at what level of its full potential might be a better question. How can we improve what we have here in New Zealand, and importantly how do we find significant growth to satisfy future New Zealanders?

It would be a quick and easy opportunity to use a column of this nature to point the finger at the Government and highlight shortcomings.

Of course, we do think there are a number of key policies that need introduction or change: compulsory superannuation, so that we have a super fund that invests more in New Zealand not just the 25% that is mandated currently; a capital gains tax on property trading (other than the family home); and we must think seriously about giving our parliamentarians the ability to govern over a longer term than the current three years.

As a nation we need long-term policies, with investment in infrastructure and business. Under the current mandate of three years, our politicians get about a year to implement anything worthwhile (in between taking on the mantle of Government and getting research and plans in place for the first year, followed by battening down during the third year to avoid criticism that would impact on re-election).

At an individual level New Zealanders also must take a stake in the game by exercising a measure of responsibility and voting for policies that are good for the country as a whole, rather than placing their individual wants and needs ahead of the community's.

Some gumption from the current team in putting the introduction of a longer term of Government to a referendum would certainly let us know that they too are looking to implement stronger long-term policies.

In the end it is to business that we must look for economic prosperity and growth.

It is the opportunities that present themselves in the larger, more populated markets that more New Zealand businesses must go after.

Of course, as a nation that is highly dependent on exports, we must continue to encourage more growth in this area. Where would we be if we had not had our dairy industry and Fonterra?

Setting targets as the current Minister of Economic Development has done, of taking our export growth from 30% of GDP to 40%, is to be admired. In fact this Government has begun setting more targets and the more of this we can have the better. We all need targets to aim for, but it is not just about exports.

For the team at Mainfreight it is the 100-year vision, the determination to take our business global that is earning valuable "export" dollars. Some might say in an unconventional manner, but one that is succeeding.

There is a lack of understanding, both at Government level and in general, of what our overseas earnings mean for New Zealand. Mainfreight may not be an exporter in the traditional sense of the word, but of the $66 million profit earned in the last financial year, 56% or $37 million was from our businesses offshore. Those funds contributed to our strong growth, safeguarding the ongoing employment of our team members, providing the ability to invest in better facilities and allowing us to pay dividends to our New Zealand shareholders.

We need to encourage more New Zealand businesses to internationalise or globalise themselves, call it what you will. The reward of those large international markets for entrepreneurial, energetic Kiwi businesses is the opportunity and success waiting to happen.

As New Zealanders we are well thought of in most countries; our honesty, straight talking, "yes, it is possible" approach is appreciated and can be a key to our success. We are seen as a nation of achievers. We are able to see gaps in larger markets that the lazier, larger corporations have neglected. Our skills have been honed by the smaller, more competitive New Zealand environment.

We just need to encourage more companies to get off their backsides and take on the risk and challenge of offshore development. Many will transform themselves for the better, ultimately delivering additional revenue and tax paid profits that come home. This will be the life blood of this country in the years to come. Furthermore, the enhanced skills and internationalisation of our business community will pay dividends for future generations.

It is appropriate also to question the kudos that is showered on our gutsy entrepreneurs who develop outstanding companies, and then sell out to offshore business owners. The fact is, that had these companies been retained in Kiwi control and encouraged to grow both here and offshore, the benefits to their investors and to New Zealand as a whole would be significantly greater.

Call them what you will but our business people, entrepreneurs, start-ups, and listed ventures, are very capable of being world class companies.

Having Government policies that are supportive of this business development is of great benefit. The current Government have begun this process with the Prime Minister and his Trade Minister putting enormous hours into trade missions and developing trade agreements with a number of nations. Using these platforms to establish New Zealand businesses in other countries is an excellent initiative.

Let us all in business take the opportunities presented for larger, more strategic growth rather than the whinging and moaning we are all sometimes guilty of in the face of challenges. Encouraging our media to cover these events and companies in a more positive manner will also be helpful. Celebrating New Zealand business success as we do our sporting success will go a long way to encouraging strong business development.

To have New Zealand working at its full potential, we need to have more confidence and belief in our ability to compete on the world stage. Too many of our business leaders limit their horizons, thinking that New Zealand is the only market they can operate in. We need our business community to internationalise and grow our economy on the back of their success in larger, international markets. We are good enough!

Don Braid

Born Timaru, educated Timaru Boys' High School, joined the New Zealand Shipping Corporation as a clerk in 1976.

Joined Mainfreight when it bought Daily Freightways, became managing director in 2001. While Kiwis know the firm largely for its blue trucks, the company uses sea, train and air to transport goods around the world. With Braid at its helm, Mainfreight has become a global logistics player. In 2011 the firm spent more than $200 million buying the Netherlands?based Wim Bosman Group, giving it a footprint across Europe.

Braid stresses that Mainfreight's success is the result of the efforts of more than 5000 "team members" around the world. Use of the word "staff" is banned within the company, private parking spaces are banned - the group managing director has to find a spot in the carpark each morning, offices are outlawed (Braid's desk is in the corner of a large, open-plan room), and all team members eat at a single, long table in the company cafeteria. The firm is well known for sponsoring Bairds Mainfreight Primary School in Otara since 1992, and has helped buy equipment such as computers and whiteboards. In the past 10 years Mainfreight has given the school about $750,000. Braid was named New Zealand Herald Business Leader of Year in 2011.

Don Braid has nominated Books in Homes to receive a $1000 donation from the NZ Herald in recognition of his contribution to this series.

Braid's ideas

* More Government investment in infrastructure and business* focus on exports and most importantly offshore developmentchange electoral cycle so Governments enjoy a longer term* compulsory superannuation* capital gains tax* celebrate our business success as we do our sporting